Please answer referring to Australian Taxation Legislation. Thank you
QUESTION THREE Tom and Mary are Australian residents in partnership as retailers of computer parts. The partnership records for the financial year ending 30 June 2017 disclose Receipts: 200,000 Gross receipts from trading 20000 Bad debts recovered 0,000 Net 0,000 Not Assessable Not Exempt Income 40,000 Net capital gain (after discounting) from the Exempt Income sale of shares acquired in 2008 | Dwdend 50% franked (The company payingthe dividend pays tax at 30%) 10,000 Payments: $100,000 Purchases of trading stock 50,000 Partners salary- Mary 20,000 Partner's salary- Tom 2,000 Interest on cash advance made to the partnership by Peter who is not a partner 10,000 Travelling expenses in respect of Tom travelling from home to work 50,000 Salaries and rent 1,000 Legal expenses in recovering bad debts 5,000 Borrowing expenses on a loan used to acquire an income earning building. The loan is for 6 years and began on 1 July 2015 3000 Painting business premises in June 2017 Other details: a) Tom and Mary share the residual profits and losses equally. b) Trading stock on hand 1 July 2016: $60,000. c) Trading stock on hand 30 June 2017 using the LIFO method: $50,000 (at market selling value), $45,000 (at replacement cost), and $40,000 (at cost price). Trading stock on hand 30 June 2017 using the FIFO method: $100,000 (at market selling value), $80,000 (at replacement cost), and $70,000 (at cost price). The partners wish to minimise their tax liability for the year ended 30 June 2017. d) The partners made a partnership net trading loss of $15,000 in the income year ending 30 June 2016. e) On 10 January 2017 Tom was robbed at gunpoint of the partners' trading receipts of $20,000 while on the way to the bank QUESTION Three continued on the next page QUESTION THREE Tom and Mary are Australian residents in partnership as retailers of computer parts. The partnership records for the financial year ending 30 June 2017 disclose Receipts: 200,000 Gross receipts from trading 20000 Bad debts recovered 0,000 Net 0,000 Not Assessable Not Exempt Income 40,000 Net capital gain (after discounting) from the Exempt Income sale of shares acquired in 2008 | Dwdend 50% franked (The company payingthe dividend pays tax at 30%) 10,000 Payments: $100,000 Purchases of trading stock 50,000 Partners salary- Mary 20,000 Partner's salary- Tom 2,000 Interest on cash advance made to the partnership by Peter who is not a partner 10,000 Travelling expenses in respect of Tom travelling from home to work 50,000 Salaries and rent 1,000 Legal expenses in recovering bad debts 5,000 Borrowing expenses on a loan used to acquire an income earning building. The loan is for 6 years and began on 1 July 2015 3000 Painting business premises in June 2017 Other details: a) Tom and Mary share the residual profits and losses equally. b) Trading stock on hand 1 July 2016: $60,000. c) Trading stock on hand 30 June 2017 using the LIFO method: $50,000 (at market selling value), $45,000 (at replacement cost), and $40,000 (at cost price). Trading stock on hand 30 June 2017 using the FIFO method: $100,000 (at market selling value), $80,000 (at replacement cost), and $70,000 (at cost price). The partners wish to minimise their tax liability for the year ended 30 June 2017. d) The partners made a partnership net trading loss of $15,000 in the income year ending 30 June 2016. e) On 10 January 2017 Tom was robbed at gunpoint of the partners' trading receipts of $20,000 while on the way to the bank QUESTION Three continued on the next page
